Chinese P2P lender Dianrong to shut down 60 stores, lay off 2,000 employees

Visual from the company's Facebook page.

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is shutting down 60 of its 90 offline stores and laying off an estimated 2,000 employees, a source with direct knowledge of the matter told Reuters on Friday.

The shrinking of Shanghai-based Dianrong comes amid Beijing’s multi-year crackdown on risky practices and excessive leverage in the financial system that has seen a wave of P2P company collapses and triggered protests by angry investors who lost their savings.

The company was co-founded by Soul Htite, who was also behind U.S. online lender LendingClub Corp. It is backed by Singapore sovereign fund GIC Pte Ltd and Standard Chartered Private Equity.

When asked for a response to the store closures and layoffs, Dianrong said it would comment later.

P2P platforms gather funds from retail investors and loan the money to small corporate and individual borrowers, promising high returns. At its peak in 2015, the sector had about 3,500 businesses in China. The P2P industry had outstanding loans of 1.49 trillion yuan ($217.96 billion) last year, far larger than the combined sector outside China.

Dianrong‘s investors also included CMIG Leasing, a unit of China’s biggest private investment conglomerate, China Minsheng Investment Group (CMIG), Tiger Global Management, Japan’s Orix Corp and CLSA, part of China’s CITIC Securities.

Also read:

China: GIC-backed P2P lender Dianrong closes $40m funding round

Chinese P2P lender Weidai starts trading on NYSE

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.